TIDMHOC
RNS Number : 4692O
Hochschild Mining PLC
02 October 2019
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_____________________________________________________________________________________
2 October 2019
Hochschild acquires the BioLantanidos Ionic Clay Rare Earth
deposit in Chile
Hochschild Mining PLC ("Hochschild" or "the Company") is pleased
to announce it has acquired the BioLantanidos ionic clay rare earth
deposit in Chile. The acquisition represents an opportunity for
Hochschild to enter into a unique rare earth deposit whilst
maintaining its focus on its core precious metal strategy. Although
the amount invested represents a small percentage of Hochschild's
current precious metal revenue and market capitalisation, it
provides significant optionality in a market expected to grow
exponentially. Rare earths are essential in several technological
components with increasing global demand and some are critical in
the manufacturing of permanent magnets used in electric vehicles,
wind turbines and drone motors amongst other things.
Key acquisitions highlights
-- Ion Adsorption Clay deposits are currently the lowest cost
sources of rare earths in the world
-- Special concentration of high demand rare earths - Terbium,
Dysprosium, Praseodymium and Neodymium
-- Simple and low cost to extract with no use of explosives
-- Environmentally friendly process to extract rare earths with
no tailings dam
-- Low capex, modular processing facility allowing for staged
growth
-- Geopolitically independent source with traceable and
sustainable production
-- Significant exploration upside potential
-- Low risk and proven mining jurisdiction
-- Substantially de-risked post initial 6.2% investment in
2018
Ignacio Bustamante, Chief Executive Officer said:
"We believe that consolidating 100% of this early-stage rare
earth deposit in Chile represents a unique opportunity for our
shareholders and is the direct result of Hochschild's deep
understanding of the region. The investment is also the result of
an extensive long-term project to identify commodities with very
strong growth characteristics as well as our ability to discover
regional investment options that might not otherwise be available.
The Company remains focused on precious metals and on our
successful exploration-based strategy but this diversification
gives us the potential to acquire a unique deposit in a key
industry with expected exponential growth and in a low risk
jurisdiction. We are also excited by the strong geological upside
potential which could see the Company become a relevant player in
the global rare earth market."
Hochschild is acquiring 93.8% of the BioLantanidos deposit that
it does not already own for a consideration of $56.3 million and is
therefore consolidating 100% of the project. BioLantanidos is a
private Chilean company that is controlled by the private fund FIP
Lantanidos, managed by private equity firm Mineria Activa SpA.
Hochschild has previously invested $2.5 million in the project
during 2018 and early 2019 in exchange for a 6.2% equity stake with
an option to increase ownership.
The deposit has a high concentration of key rare earth minerals
and in particular those with permanent magnetic properties such as
Terbium, Dysprosium, Praseodymium and Neodymium. These metals offer
highly attractive enhancement properties for a wide range of
end-use applications and play a pivotal role in driving the
efficiency of motors, particularly in electric vehicles and wind
turbines.
The project consists of ionic clay resources, similar to those
found in China, but very different from most other rock-based rare
earth projects worldwide. Mineralisation occurs from the surface to
20-30 metres deep and mining will not require explosives. The clay
undergoes a simple washing process in which rare earths will be
desorbed into a solution, concentrated and calcined to obtain a
rare earth oxide. Furthermore, there is no requirement for a
tailings dam as the washed clay is expected to be returned to the
open pits. The process is environmentally friendly as it does not
require potentially harmful chemicals whilst capital and
operational expenditure is projected to be low with the result that
the project is expected to be one of the lowest cost rare earth
producers.
Although BioLantanidos owns approximately 72,000 hectares of
concessions, an initial modular project has been developed in the
Penco area in an area of 300 hectares, approximately 15km from
Concepción in Chile and with excellent access to infrastructure and
energy. Other modules are expected to be evaluated in the future,
providing significant low capital expenditure growth potential.
Since the time of their initial investment, BioLantanidos has
constructed an on-site pilot plant that has demonstrated both
technical and commercial viability, and the opportunity to scale up
into industrial operations. Although the company has prepared a
feasibility study, it is Hochschild's intention to revise the study
over the next 18 months as well as appointing a dedicated
management team to oversee development of the project. The Board
strongly believes that BioLantanidos offers significant long-term
value potential and that management's deep understanding of the
region ensures that Hochschild is well placed to deliver it.
________________________________________________________________________________________
A conference call will be held at 2.30pm (London time) on
Wednesday 2 October 2019 for analysts and investors.
Dial in details as follows:
International Dial in: +44 333 300 0804
UK Toll-Free Number: 0800 358 9473
Pin: 76581076#
A recording of the conference call will be available for one
week following its conclusion, accessible from the following
telephone number:
International: +44 333 300 0819
UK Toll Free: 0800 358 2049
Pin: 301300905#
________________________________________________________________________________________
________________________________________________________________________________________
Enquiries:
Hochschild Mining PLC
Charles Gordon +44 (0)20 3709 3264
Head of Investor Relations
Hudson Sandler
Charlie Jack +44 (0)207 796 4133
Public Relations
________________________________________________________________________________________
About Hochschild Mining PLC
Hochschild Mining PLC is a leading precious metals company
listed on the London Stock Exchange (HOCM.L / HOC LN) with a
primary focus on the exploration, mining, processing and sale of
silver and gold. Hochschild has over fifty years' experience in the
mining of precious metal epithermal vein deposits and currently
operates three underground epithermal vein mines, two located in
southern Peru and one in southern Argentina. Hochschild also has
numerous long-term projects throughout the Americas.
________________________________________________________________________________________
Forward looking statements
This announcement may contain forward looking statements. By
their nature, forward looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that will or may occur in the future. Actual results,
performance or achievements of Hochschild Mining PLC may, for
various reasons, be materially different from any future results,
performance or achievements expressed or implied by such forward
looking statements.
The forward looking statements reflect knowledge and information
available at the date of preparation of this announcement. Except
as required by the Listing Rules and applicable law, the Board of
Hochschild Mining PLC does not undertake any obligation to update
or change any forward looking statements to reflect events
occurring after the date of this announcement. Nothing in this
announcement should be construed as a profit forecast.
This announcement contains information which prior to its
release could be considered inside information.
Note
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (Regulation (EU) No.596/2014). Upon the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
LEI: 549300JK10TVQ3CCJQ89
- ends -
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END
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